Concept explainers
1.
To identify: If the company uses
2.
To identify: Explain the costs included in the
3.
To identify: Explain the bills of materials when discussing product cost
4.
To identify: Explain if the iPad AIR 2 is making $303.75 if sold. If not, then what are the other costs would that gross profit have to go toward covering.
5.
To identify: Explain where the BOM costs appear on the income statement
6.
To identify: Explain if company start manufacturing iPad Air 2 in United States which cost component will increase or decrease. What other factors would company consider while deciding on the location for manufacturing its products
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- To complete the first setup on a new machine took an employee 100 minutes. Using an 80% incremental unit-time learning model indicates that the second setup on the new machine is expected to take ________. Select one: a. 70 minutes b. 80 minutes c. 120 minutes d. 60 minutesarrow_forwardProfit Planning and Control This case is a manufacturer and could make specialty bikes, ski or outdoor equipment, computers, food like chocolates, saltwater taffy, cookies, or donuts, etc. Create the balance sheet, income statement, and statement of the cash flow from the following information. Use the following information for the learning experiences Sales volume units = 11,000 Sales price/unit = $100 Variable manufacturing costs/unit = $60 Fixed manufacturing costs = $210,000 Fixed sales & administration costs = $190,000 Business income tax rate = 25% Current assets = $250,000 (Cash $50,000, Accounts Receivables $100,000, Inventory $100,000) Fixed assets = $750,000 Current liabilities = $200,000 (Accounts Payable $100,000, Short Term Debt $100,000) Long Term Debt = $300,000 Owners' Equity = $500,000arrow_forwardNUBD Company is planning to introduce a new product with an 80 percent learning rate for production for batches of 1,000 units. The variable labor costs are P30 per unit for the first 1,000-unit batch. Each batch requires 100 hours. There are P10,000 in fixed costs not subject to learning. What is the cumulative total time (labor hours) to produce 16,000 units based on the cumulative average-time learning curve? A. 655.36 hours B. 256 hours C. 160 hours D. 409.6 hoursarrow_forward
- Eric Krassow's firm is about to bid on a new radar system. Although the product uses new technology, Krassow believes that a learning rate of 75% is appropriate. The first unit is expected to take 700 hours, and the contract is for 40 units. What is the total amount of hours to build the 40 units?arrow_forwardLimbo Technologies Ltd manufactures laptops for commercial use. The company is at present contemplating production of laptops specifically for secondary school students in Trinidad and Tobago. The activities necessary to build an experimental model and related data are given in the table below. ACTIVITY PREDECESSOR NORMAL TIME (WEEKS) CRASH TIME (WEEKS) NORMAL COST ($) CRASH COST ($) A - 4 2 1000 1600 B - 6 3 3000 3500 C A 3 1 2500 3000 D A,B 6 5 1500 1850 E D 4 2 3500 4200 F C 4 3 2250 3000 G D 3 2 1900 2500 H F,G,E 2 1 400 500 i) Draw the network diagram and state the project completion time [5] ii) Crash the project to 13 weeks [4] iii) What would be the total cost of the project? [2] iv) Draw…arrow_forwardLimbo Technologies Ltd manufactures laptops for commercial use. The company is at present contemplating production of laptops specifically for secondary school students in Trinidad and Tobago. The activities necessary to build an experimental model and related data are given in the table below. ACTIVITY PREDECESSOR NORMAL TIME (WEEKS) CRASH TIME (WEEKS) NORMAL COST ($) CRASH COST ($) A - 4 2 1000 1600 B - 6 3 3000 3500 C A 3 1 2500 3000 D A,B 6 5 1500 1850 E D 4 2 3500 4200 F C 4 3 2250 3000 G D 3 2 1900 2500 H F,G,E 2 1 400 500 i) What would be the total cost of the project? arrow_forward
- Triad Children's Center (TCC), a non-profit organization, uses relevant cost analysis to determine whether new services are desirable. TCC is looking at adding a new educational program for grade school children who are having difficulty with their reading and math skills. The following relevant costs are expected if the program is accepted: Costs (per year) Program Director salary $ 39,000 Part-time Assistants $ 28,000 Variable cost per child $ 900 TCC estimates that a maximum of 40 children will participate in this program in the first year. If TCC decides to implement this program, funding will be received from the City Chamber of Commerce ($50,000) and a local Private University Endowment Fund ($35,000). Calculate the expected surplus or deficit from operations given the above information.arrow_forwardhe Shining Stars primary school was the recent recipient of a technology grant to source and implement a school management system. The school administrator is not technology savvy and therefore sought advice from three of the board members who were knowledgeable in the information systems and technology field. One director advised the administrator to purchase an off-the-shelf solution which would allow the school to get the system configured and up and running in a short period with reasonable costs. The second advised the administrator to invest in the development of a unique system to meet the custom requirements of the school’s administration. He suggested that this would create a closer fit to the school’s needs compared to purchasing software, but will cost more. The third director suggested using an open source solution which would have little if any upfront costs but may take some time to set up. i) Identify the…arrow_forwardConsider the following hypothetical sales scenario. A large community college buys and takes delivery of 50 iMac computers from a local Apple store. The invoiced price is $2,800 per unit and includes hardware, software essential to the functionality of the hardware, third-party software including Microsoft Office for Mac and Adobe Creative Suite, and two years of tech service and support. Apple uses vendor-specific objective evidence to determine unit prices of $2,500 and $300 for hardware and the essential software, respectively. The third-party software typically retails for $500 (but Apple purchases it at a 50% discount) and equivalent service and support contracts are $100 per year. The customer (the community college) can opt to purchase subsequent essential software and OS upgrades. Indicate how Apple should record gross revenue for the transaction at the time the customer takes delivery of the computers. Your response should include specific dollar amounts.arrow_forward
- ondor Airplane Company has built a new model jet aircraft which it intends to sell to high net worth clients. This aircraft required 25,000 hours to complete. Condor believes an incremental unit-time learning model with an 82% learning curve best reflects the company's production efficiency. Condor just received a contract to make fifteen identical aircraft. What will be the expected unit time for the sixteenth aircraft?arrow_forwardThe actual and planned data for Underwater University for the Fall term were as follows: Actual Planned Enrollment 4,500 4,125 Tuition per credit hour $120 $135 Credit hours 60,450 43,200 Registration, records, and marketing costs per enrolled student $275 $275 Instructional costs per credit hour $64 $60 Depreciation on classrooms and equipment $825,600 $825,600 Registration, records, and marketing costs vary by the number of enrolled students, while instructional costs vary by the number of credit hours. Depreciation is a fixed cost. Prepare a variable costing income statement showing the contribution margin and operating income for the Fall term. Underwater University Variable Costing Income Statement For the Fall Term Revenue $ Variable costs: Registration, records, and marketing costs $ Instructional costs Total variable costs $ Contribution margin $ Depreciation on classrooms and equipment Operating income…arrow_forward(Learning Objective 2: Distinguish a capital expenditure from an immediate expense)LimeBike, located in San Mateo, California, is a startup founded in 2017. Its mission isto make shared bicycles accessible and affordable. The company has taken the basic idea ofshared bicycles and eliminated the need to return the bike to a docking station, which may notbe near the cyclist’s destination. LimeBike charges $1 per 30 minutes of riding, or $0.50 perride for students.To use LimeBike, you first use the LimeBike app to locate one of the citrus-colored bikesnear your location. Once you are at the bike, you scan the QR code on the bike or enter thebike’s plate number into the app to unlock the bike. When you are finished using the bike, youpark the bike by a bike rack or post––anywhere that is legal and visible. Once you press downthe back-wheel lock, the trip is finalized and your payment is processed by LimeBike’s app.LimeBike does not depend on government funding, making it appealing to…arrow_forward
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning